The government must allow an independent inquiry into the death of an Iraqi civilian allegedly killed by British troops, the court of appeal ruled today.

The court rejected a challenge by the government against an earlier high court ruling backing demands by the man's family for an inquiry to be held.

Hotel receptionist Baha Mousa was allegedly tortured and beaten to death in September 2003 while in the custody of troops from the Queen's Lancashire Regiment in Basra.

The government had refused to hold an inquiry into the allegedly unlawful killing of the 26-year-old. However, in December last year two judges at the high court in London backed his family's demand for an "independent and effective" inquiry.

Today, Lord Justice Brooke, sitting at the court of appeal with Lord Justices Sedley and Richards, dismissed the government's challenge to the high court ruling.

Lawyers acting for Mr Mousa's family and five other Iraqi families who also allege mistreatment of their relatives by British troops described today's ruling as a "landmark" judgment.

The five other families were refused independent inquiries by the high court last December, and today lost their appeals against those decisions.

Corporal Donald Payne, 34, faces a manslaughter charge over the death of Mr Mousa in a prosecution brought by the Army Prosecution Authority. A trial is expected to begin in June 2006.

Six other soldiers face various other charges connected to his death, including inhuman treatment of prisoners, assault, neglecting to perform a duty and negligently performing a duty.

All six Iraqi families had claimed that they were entitled, under human rights laws, to unprecedented investigations into whether troops were guilty of unlawful killing.

In a statement given out after the court of appeal judgment, lawyers for the families said: "The court of appeal has today handed down a landmark judgment about the torture and abuse of Iraqi civilians in detention with UK armed forces in occupied Iraq.

"The court of appeal upheld the high court's ruling from December 14 2004 that the European convention on human rights and the Human Rights Act 1998 do apply to detention cases.

"It extended the scope of jurisdiction to include cases of Iraqi civilians being deprived of their liberty generally and then tortured."

The high court had found only that jurisdiction extended to a prison on a quasi-territorial basis.

The lawyers described it as an important extension that "will mean that many cases involving death and torture in situations where Iraqis have been deprived of their liberty will now have to be the subject of independent and proper investigations".

Phil Shiner, of Public Interest Lawyers, said there must now be an independent investigation into Mr Mousa's death.

"The government must follow the court's very clear ruling that the military system of investigation and prosecution in torture and abuse cases is fundamentally flawed," he said. "It requires urgent and far-reaching reform."